Marginal revenue calculator
Marginal revenue is what one more unit sold brings in. When you have to lower the price to sell more, it is less than the price. Enter two points, either the price and quantity at each or the total revenue at each quantity. The calculator shows the marginal revenue per extra unit, total and average revenue, and, with a marginal cost, whether selling more raises profit.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Choose whether to enter prices or total revenue.
- Enter the quantity and the price (or total revenue) at the first point.
- Do the same for the second point.
- Optionally add the marginal cost to compare.
- Total revenue TR = price × quantity
- Marginal revenue MR = (TR₂ − TR₁) ÷ (Q₂ − Q₁)
- Average revenue AR = TR ÷ Q (the price when every unit sells at one price)
Worked example
At 20 a shop sells 100 units; at 18 it sells 120.
- TR goes from 2,000.00 to 2,160.00, a change of 160.00.
- MR = 160 ÷ 20 = 8.00 per extra unit, while the price is 18.
By revenue: sales rising from 500 to 560 units lift revenue from 10,000 to 10,800, so MR = 800 ÷ 60 = 13.33. With a marginal cost of 10, each extra unit adds 3.33.
Tips
- Use points close together: MR changes along a demand curve.
- With a single price for any quantity (a perfectly competitive market), MR equals the price.
- Pair it with the marginal cost calculator to find where extra output stops paying.
Frequently asked questions
How do you calculate marginal revenue?
Marginal revenue = change in total revenue ÷ change in quantity. Selling 100 units at 20 brings 2,000; selling 120 at 18 brings 2,160. MR = 160 ÷ 20 = 8 per extra unit.
Why is marginal revenue lower than the price?
To sell the extra units, the price drops for every unit, not just the new ones. In the example the 20 extra units bring 18 each, but the first 100 now sell for 2 less, so MR is 8, not 18.
Can marginal revenue be negative?
Yes, when a price cut adds fewer sales than it costs on the units you already sold. Going from 50 units at 10 to 70 units at 7 lowers revenue from 500 to 490, so MR = −0.50. That happens where demand is inelastic.
What is the profit-maximizing rule?
Increase output while marginal revenue is above marginal cost and stop where they meet. A positive MR − MC means the extra units add profit.